The Regulation on the Non-Use of Crypto Assets in Payments, published in the Official Gazette on Friday, 16 April (today) and set to enter into force as of 30 April, looks likely to seriously affect developments related to cryptocurrencies in Turkey.
There are several important noteworthy points in the regulation. We can list them as follows:
- Crypto assets have been defined for the first time and designated as assets. This means that crypto assets are now officially and legally recognized and defined in Turkey.
- To prevent informality, the rule "No institution other than banks may act as an intermediary in crypto transfers" has been introduced. This shows that all crypto transactions can be tracked through banks. The next step is likely to be a tax regulation.
- It removes the payment function of crypto assets, whose use is rapidly increasing all over the world. Even though the payment institutions and e-money institutions in our country do not use them in payments and only a few of them intermediate purchases and sales, it will seriously affect the pace of development in payment systems.
- Although at first glance it looks like a regulation that restricts payment and e-money institutions outside the banking sector and is more driven by "money laundering concerns", it may have enough impact to trigger fintech ventures to move abroad instead of staying in our country.
- How organizations such as Mastercard and Visa, which have made serious investments in recent years toward the use of cryptocurrency in payments, will comment on the decision that cryptocurrency cannot be bought or sold with credit cards and similar instruments, and cannot be used in any purchase, is also a matter of curiosity.
- Although the regulation is still very new, payment institutions and e-money institutions will have objections on this matter; I think there will be updates in the communiqué as a result of new regulations.
- One of the most important issues is how payment institutions that can accept cryptocurrency payments globally will act regarding operating in our country. I am also very curious about developments on this matter.
It is worth outlining the content of the regulation as follows:
Purpose and scope
ARTICLE 1 – (1) The purpose of this Regulation is to determine the procedures and principles regarding the non-use of crypto assets in payments, the non-use of crypto assets directly or indirectly in the provision of payment services and the issuance of e-money, and the non-intermediation by payment and e-money institutions of platforms that offer trading, custody, transfer or issuance services for crypto assets, or of fund transfers to be made from these platforms.
Legal basis
ARTICLE 2 – (1) This Regulation has been prepared on the basis of subparagraph (f) of item (I) of the third paragraph and the fourth paragraph of Article 4 of the Law on the Central Bank of the Republic of Turkey No. 1211 dated 14/1/1970, and the third paragraph of Article 12 and the sixth paragraph of Article 18 of the Law on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions No. 6493 dated 20/6/2013.
Non-use of crypto assets in payments
ARTICLE 3 – (1) In the application of this Regulation, a crypto asset refers to intangible assets that are created virtually using distributed ledger technology or a similar technology and distributed over digital networks, but that are not qualified as fiat currency, scriptural money, e-money, a payment instrument, a security or another capital market instrument.
(2) Crypto assets cannot be used in payments, directly or indirectly.
(3) No service can be offered for the direct or indirect use of crypto assets in payments.
Non-use of crypto assets in the provision of payment services and the issuance of e-money
ARTICLE 4 – (1) Payment service providers cannot develop business models in which crypto assets would be used directly or indirectly in the provision of payment services and the issuance of e-money, and cannot offer any service related to such business models.
(2) Payment and e-money institutions cannot act as intermediaries for platforms that offer trading, custody, transfer or issuance services for crypto assets, or for fund transfers to be made from these platforms.
Entry into force
ARTICLE 5 – (1) This Regulation enters into force on 30/4/2021.
Execution
ARTICLE 6 – (1) The provisions of this Regulation are executed by the Governor of the Central Bank of the Republic of Turkey.
You can access the relevant communiqué at the link below:
https://www.resmigazete.gov.tr/eskiler/2021/04/20210416-4.htm
